FROM
THE DISTRICT COURT OF TRAVIS COUNTY, 53RD JUDICIAL DISTRICT
NO. D-1-GN-15-003690, HONORABLE KAREN CRUMP, JUDGE PRESIDING

Before
Justices Puryear, Field, and Bourland.

OPINION

David
Puryear, Justice.

In this
administrative appeal, Beauty Basics Inc. d/b/a Aveda
Institute-Dallas (the Institute), a private beauty school,
contests a decision of the Texas Commission of Licensing and
Regulation assessing a $1, 500 administrative penalty against
the school. See Tex. Occ. Code § 51.301
(granting Commission authority to impose administrative
penalties for violations of laws established under regulatory
program administered by Texas Department of Licensing and
Regulation). The Commission assessed the penalty based on its
determination that the Institute's tuition refund policy
violated the Occupations Code by requiring students who
withdraw prior to completing a cosmetology program to pay the
remaining unpaid tuition. See id. §§
1602.451, .452, .458, .459. For the following reasons, we
affirm the judgment of the district court upholding the
Commission's decision.

The
Legislature has entrusted the Texas Department of Licensing
and Regulation (the Department) with the regulation of
cosmetology and related occupations. See id.§
1603.002. The Commission governs the Department. Id.
§ 51.051(b). The Institute is licensed by the Department
as a "private beauty culture school." Id.
§ 1602.303. As a result, the Institute is bound by the
requirements of sections 1602.451-.465 of the Occupations
Code, which govern the operation of beauty schools. See
id. §§ 1602.451-.465.

In July
2010, a student signed an enrollment contract with the
Institute to attend a 1, 500-hour course in cosmetology to
run for fifty-two weeks within a period of twelve months. The
tuition for the course was set at $19, 282.50. In April 2011,
after completing 73.54% of the program, the Institute
expelled the student, for reasons not relevant to this
appeal. At the time of her expulsion, the student had paid
tuition and fees equaling $15, 406.42. On the day it expelled
the student, the Institute demanded $3, 976.08 for the
remaining tuition and fees owed for the full-year program.
The student paid the Institute[2]and then filed a complaint with the
Department.

The
Department investigated the student's complaint and
determined that the Institute's refund policy violated
the Occupations Code by requiring students who withdraw early
from the 1500-hour program to pay the full, unpaid tuition
balance. Cf. id. § 1602.458(a) ("The
holder of a private beauty culture school license shall
maintain a refund policy to provide for the refund of any
unused part of tuition, fees, and other charges paid by a
student who . . . is terminated from the course of training
before completion of the course."). The Institute's
refund policy-which is printed in its enrollment
contracts-provided:

For students who enroll in and begin classes, refunds are
determined by a formula using a percentage of time enrolled
plus a termination fee of $100 (see the schedule below). The
percentage of time enrolled is calculated by dividing the
number of actual hours enrolled by the total number of actual
hours in the course. The following schedule of tuition
adjustments is used:

Percentage of Time to Total Course Tuition

Amount of Tuition Owed to School

Less than 30 hours

10%

31-90 hours

20%

91 hours-25%

25%

25.1%-49.99%

50%

50.00% to 100.0%

100%

The
Department issued the Institute a Notice of Alleged
Violation, which the Institute disputed.

The
Institute requested a hearing before an administrative law
judge (ALJ) with the State Office of Administrative Hearings
(SOAH), and in those proceedings the parties entered into a
stipulation of the relevant facts of the case, narrowing the
scope of the contested case to the statutory interpretation
of the refund-policy requirements under the Occupations Code.
After ruling in the Department's favor on the
parties' cross-motions for summary disposition, the ALJ
issued a proposal for decision (PFD) determining that the
Institute's refund policy was in violation of the
Occupations Code and recommending that a penalty of $4, 250
be assessed. The Commission initially adopted the PFD without
modification but, upon rehearing, issued a final order
adopting the PFD in its entirety except to reduce the
administrative penalty from $4, 250 to $1, 500 because it
"believe[d] a lower penalty is more appropriate in light
of all the facts and circumstances."

The
Institute filed a suit for judicial review challenging the
Commission's order, and the district court affirmed the
Commission's decision. The Institute appeals, contending
that the Commission and the trial court misinterpreted
sections 1602.458 and 1602.459 of the Occupations Code in
concluding that (a) the Institute may not recover unpaid
tuition from a student whose enrollment is terminated after
completing more than 50% but less than 100% of the
school's program and (b) the Institute published a refund
policy that did not comply with the Occupations Code.

DISCUSSION

Because
the sole issue in this case is one of statutory construction,
we review the Commission's legal determinations de
novo.[3]See
Nobles v. Employees Ret. Sys. of Tex., 53 S.W.3d 483,
490 (Tex. App.-Austin 2001, no pet.). Two statutes set out
the requirements of a beauty school's refund policy and,
at the relevant time period, provided:

(a) The holder of a private beauty culture school license
shall maintain a refund policy to provide for the refund of
any unused part of tuition, fees, and other charges paid by a
student who, at the expiration of the ...

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